Thursday, September 9, 2010

Confessions of a Serial Liberty-Reducer

Since I have been placed by Econ Journal Watch in the leading ranks of economists who have signed “liberty-reducing” petitions, I figure I should respond somehow. An obvious first reaction would be, if this is all it takes to be grouped with such distinguished and thoughtful individuals as Jamie Galbraith and Eileen Applebaum (not to mention our own Michael Perelman), please give me more to sign. But maybe I should say something about this idea of liberty-reduction as well.The authors openly state that they rely on a single principle to gage liberty, noncoercion by government. By this standard, for instance, an increase in the minimum wage is liberty-reducing, since it increases the number of wage offers that would be criminalized. This is not just a theoretical possibility; in Los Angeles the co-owners of a chain of carwashes were forced to pay over a million dollars to their workers for minimum wage violations, a plea bargain they made in order to avoid long prison sentences. There can be no denying that the minimum wage, whether you favor it or not, has an illiberal aspect.

Of course, the starting point for evaluating the single-minded reliance on noncoercion as the barometer for liberty is normally Isaiah Berlin’s essay, “Two Concepts of Liberty”. Berlin contrasts noncoercion, or “negative” liberty, with “positive” liberty, which enables individuals to make the choices they truly prefer. Berlin’s treatment confuses three different variants of liberty, however, so it is a good idea to put his essay down and think more carefully about the issue. The most precise definition of positive liberty sees it as applicable to the individual level, but pertaining to the feasibility of choosing X (what one prefers) rather than simply the absence of a coercive constraint on choosing X, as negative liberty requires. To the extent that the minimum wage provides more resources for people at the low end of the labor market, so they can enjoy a wider range of choice over access to the necessities and comforts of life, it enhances positive liberty at the expense of negative. (Workers are denied the choice of accepting, and employers the choice of offering, a sub-minimum wage.) I will say in passing that I accept Berlin’s judgment that, of the two, negative liberty is more precious in a wide variety of situations, but I think I can demonstrate that in another set of situations, also quite large, positive liberty can have as much or more “liberty content” as its negative twin. (This is due to the interdependent nature of economic and social life, which can sometimes make the costs of not being supported by others comparable to the costs of being coerced by them—so that the threat of nonsupport becomes coercive.)

Nevertheless, there are still two more types of liberty that have large followings. One is collective liberty, the freedom to engage in collective action on the part of a group with a common identity or shared interests. The great theorist of this notion was John Dewey; see, for instance, his book Individualism Old and New. Economists steeped in game theory should have no problem in understanding why such a conception of liberty is necessary and popular. At an intuitive level, if there is any basis for people conceiving of themselves as a “we” instead of simply a set of “I’s”, there ought to be a corresponding idea of joint liberty. It should also be obvious that there is great potential for abuse if the “we” is insufficiently elective, or if inadequate allowance is made for individual differences within even the most cohesive groups—but all conceptions of liberty are dangerous if they are blind to the others.

The fourth conception arose during the Romantic period in the late eighteenth and early nineteenth centuries and is associated, in the United States, with writers like Emerson and Thoreau. If collective liberty is situated above the level of the individual, “inner” liberty is two levels down: it is about freedom from convention, habit, and any other barriers to the discovery and cultivation of one’s genuine potential. We know this today as the ethos of rock ‘n roll: the role of the singer or guitar hero is not to be the most technically proficient (although this is admired), but to reveal to the audience his or her deepest, most genuine self, a role model for this kind of liberation.

Schooled by Berlin, we often think of tradeoffs between competing notions of liberty, and this is undoubtedly true, but with four distinct possibilities to consider, there may be synergies as well. The case of the minimum wage is instructive. Here is my own story: I came of age during the 1960s, when there was full employment and the real minimum wage was far higher than it is today. Thanks to the counterculture, I took time out to explore different life directions: I spent years in underground newspapers and, later, community radio to see if I wanted to be an “alternative” journalist. I spent a few months trying out the life of a professional chess player. (OK, I was no Ken Rogoff, but I did combine chess journalism, instruction, and competitive play at a lower level.) I also dabbled in other stuff that we can leave to the side right now.... How was this possible? The high minimum wage, I would argue, had a lot to do with it. I felt free to experiment because, at any time, I could find a low-labor-force-attachment job that paid enough to keep me afloat. In other words, the positive liberty I enjoyed thanks to a high minimum wage also enhanced my inner liberty to find myself during the typical finding-oneself years. I think young people coming of age today have a lot less of this freedom, and this is sad.

Closing note: the authors of the EJW article speak of “ideological” biases of economists based on the extent to which they support or oppose the noncoercive conception of liberty. I see it differently. To me, to be ideological is to be unable to recognize the claims of competing points of view. For instance, raising the minimum wage increases some kinds of liberty of some people, and reduces other kinds of others. You strike the balance according to your values and judgment. But a nonideological view demands that you bear in mind that, even though you may think the balance falls on the side of raising the wage floor, this does not cancel out the negative consequences. If a thousand workers are better able to put food on the table, but ten teenagers are unable to get an after-school job of a few hours a week, the benefits to the larger group do not erase the costs to the smaller. Ideological thinking typically means putting on only one set of glasses and disregarding other points of view. Nonideological thinking means being able to live with contradictions.

In this sense, I think the categorizers and not (necessarily) the categorized in the EJW article are the ideologues.

5 comments:

Very nice essay on the four types of liberty. I suspect few politicians or advisors to them are capable of holding two opposing propositions in their head and being to reconcile them much less four and so we have the sad, arid, ideological battles in Congress and elsewhere.

Excellent essay.I have the sneaking suspicion that it is preferable to consider the issue of liberty from WITHIN the framework of certain constraints in the first place. Like... we are not... born free, to the extent that we are born INTO a historical, economic, and social context that will exert its influence on us, permitting us MORE OR LESS to enter into rich relationships with others in society, and make a contribution in one way or another. (Not necessarily moneyed, either...)I find it FRUSTRATING that ALL theorizations (that I know of, and I could be way off...) insist stridently on the NECESSARY AND INEVITABLE OPPOSITION involved between individual and social body.To me this is... an IDEOLOGICAL (in the way you are using the word...) assumption that does not necessarily hold true.It COULD be argued that... the RICHEST society (I'm not promoting filthy lucre, but I'm not knocking it either) is one which finds the way to NOT OPPOSE the interests of the individual and of the social body.We need... new ways of looking at this problem. Even... Jean Jacques had blinders on to this one.I think...

I like your perspective on the tradeoffs. I tend to think of them in a slightly different manner, though.

Granted, a minimum wage law reduces the set of possible contracts--a restriction. How the benefits of a contract are distributed between the respective parties, however, is shaped by the balance of power between them. Minimum wage laws are a partial remedy for an inequality of power. Too often, those who speak as if they held liberty's copyright dance around this part of life by either treating the respective parties as equals in the negotiation or saying it's a mutual gain, so, shut up and mind your own business--and never mind how such an advantage compounds over multiple exchanges through the years!!

I admire Berlin, but some perspective often seems lost about his thinking. For one, he was a Cold War liberal who accepted (broadly speaking) Roosevelt's reforms and whose defining concern at the time was Communism. He wasn't addressing the likes of the Cato Institute, in part because he didn't anticipate the need. In a follow-up to his famous essay, which was the introduction to the book Four Essays on Liberty, he treated the evils of laissez-faire as real and deserving of remedy, but he seemed to think that should be a given. He conceded that negative liberty had some "minimum conditions" for its exercise, without which it would be a hollow farce.

I think Daniel Davies was on to something when he responded to Cato's criteria for freedom here.

Also, the core of Berlin's worldview was the interminable conflict between all good things. (John Gray describes it as agonistic liberalism.) This perspective has something more to add to contemporary debates. Simply put, there are tradeoffs of negative liberty against negative liberty. Establishing property rights means allocating restrictions, and these are not limited to prohibitions against force by non-owners, bearing upon many normative debates of who should be free to do what and to what extent. The question is not one for legal technocrats alone. The clearest case for this view that I found was in The Progressive Assault on Laissez Faire: Robert Hale and the First Law and Economics Movement by Barbara H. Fried. The Liberty Lover's (r) slight of hand here is the familiar one of assuming away, or dismissing as irrelevant, or bracketing as a merely technical concern, the interdependence of actions by free individuals.

I'm entertained by this because Peter Dorman was one of my teachers as an undergraduate and Bryan Caplan (at EconLog) was one of my grad school teachers. The blogosphere truly reduces degrees of separation faster than you can say Kevin Bacon.

But anyway, my tangible point is I generally find the minimum wage works in the opposite way as almost everyone folks suggests. It's not the upper middle class teen who loses from the job, but the working poor.

A minimum wage gives employers a long line of folks to choose from. If given the choice between a perky, attractive teen with a middle class work ethic or a poor, weary single parent who might have to call off work at any time if their kid gets sick at any time, many employers will choose the former over the latter.

This is exactly why a substantial chunk of individuals making minimum wage belong to families in the upper half of the income distribution.

I point this out because to some extent it underscores what Dorman writes. Peter is a smart, hard working guy. A minimum wage stacks the odds in his favor (as a young man seeing the world) when applying to any particular low paying job, at the cost of folks who don't have his skills but would be willing to work for less.

So in a way, I agree a minimum wage law decides between helping people put food on the table vs. helping youth on a voyage of self discovery. But I think it helps in a way consistent with Dorman's experience and opposite to the way he implies minimum wage actually works.